Checkered Past, Uncertain Future

Have the cost and schedule woes of the Littoral Combat Ship been worth it?

The Littoral Combat Ship (LCS) program was supposed to be a bold initiative that would break the traditional mold of Navy shipbuilding by developing and deploying a relatively small, fast, and versatile warship in half the normal time and for about one-fourth the cost of current surface combatants. It was to be the key to achieving the Navy's goal of a 313-ship Fleet.

Instead, the LCS has become a painful example of the problems that have plagued Navy shipbuilding efforts for decades and have made 313 operational ships a dream rather than a plan. According to the 30-year shipbuilding plan released in 2005, the Navy would have ordered 22 LCSs and have seven in the Fleet by the end of Fiscal Year 2010. If it actually is able to execute the contracts currently planned-not a sure thing, considering the program's history - the Navy would have two LCSs built, and possibly in service, and five more under contract by that time.

And unless the contractors are able to make some major reductions in price, the future LCSs will cost more than twice the $220 million promised. That would make it unlikely, within expected future shipbuilding budgets, that the Navy could buy six or more LCSs a year, as planned.

The Original Plans

When the LCS program was launched in 2002 by Admiral Vern Clark, then Chief of Naval Operations, he proposed building 70 as part of a 325-ship Fleet. Revised by Clark's successor, Admiral Mike Mullen, the plan envisioned 55 LCSs in a future Fleet of 313.

Those latter numbers have remained the stated goal, although Admiral Gary Roughead, the current CNO, said - 55 is "the minimum" for the LCS. "I believe when these ships get out and operate there is going to be an increased demand for more LCSs," Roughead said at the commissioning of the USS Freedom (LCS-1) on 8 November in Milwaukee, Wisconsin.

As it was conceived, the LCS would be a simple "sea frame" that could be cheap compared to the $1 billion for current surface warships, because it would be built to nearly commercial shipbuilding standards. That idea was disturbing to many surface warriors and outside analysts, because, as the name implied, the LCS was intended to operate primarily in the dangerous littoral, or coastal, waters.

The ships also could be relatively cheap because they would not be built with the expensive Aegis combat systems of the Arleigh Burke - class destroyers or Ticonderoga -class cruisers. Instead, the LCS would be designed to accept a variety of portable "mission packages," with sensors, monitors, controls, and weapons designed for specific assigned missions.

Those mobile combat systems and the technicians to maintain and operate them would allow the LCSs to fill a number of crucial mission gaps, including mine detection and clearing, and defense against quiet diesel submarines and small, fast attack craft. The simplicity in design also was expected to enable the builders to produce LCSs much faster than the high-tech warships. And the LCS would be much less expensive to operate, because it would have a small primary crew - with 15 as a target and 50 as the upper limit—rather than the 300-plus people needed for Aegis cruisers and destroyers.

Low cost and rapid construction meant the 55-ship class could be operational in about 10 years, producing the 313-ship Fleet years earlier than otherwise possible. Unfortunately, a lot went wrong with those plans.

The Contractors

After a brief preliminary design competition among three bidders, contracts for the first two ships were awarded in May 2004 to teams led by Lockheed Martin and by General Dynamics. Lockheed Martin partnered with Marinette Marine, which built the first ship in its Wisconsin yard (Bollinger Shipyards), naval architects Gibbs & Cox, DRS Technologies, Rolls-Royce, and Fincantieri, an Italian shipbuilder that supplied the design on which the LCS-1 is based. General Dynamics teamed with Austal USA, BAE Systems, L-3 Communications, Maritime Applied Physics Corp., and Northrop Grumman. Austal would build the LCS-2 in its Mobile, Alabama, yard based on a design from its Australian parent.

The Navy initially planned to award follow-on contracts while the first ships were being built, then do a competition to pick a single design for serial production of the class, all before the lead ships had been thoroughly tested at sea. Congress and others widely criticized that plan. Work on the first two ships quickly bogged down, and the costs rapidly grew well over the $220 million estimate.

A major factor in both the delays and the cost growth was the fact that in the effort to speed production, the contractors were designing the ships while they were building them. Even worse, the Navy was still developing new construction standards, called Naval Vessel Rules (NVR), that the designers were supposed to follow. The Navy belatedly decided to create NVR, a blend of commercial and warship specifications, in response to concerns about sending a merchant-class ship into combat.

Vice Admiral Kevin McCoy, commander of Naval Sea Systems Command, recently conceded that developing the new rules that late was a mistake. "We introduced NVR at the start of the acquisition program. Ideally, we should have done that earlier so that industry had more experience with it," McCoy said.

Cancelled!

When the price of the first two ships had soared to twice the projected cost, Navy Secretary Donald Winter tried to get the contractors to agree to fixed-price contracts for the next two ships. When that failed, Winter cancelled the LCS-3 and -4 and applied the funds to cover the cost overruns on the first two. Alarmed at the rapidly rising cost, Congress imposed a $460 million price cap for each LCS in the FY 08 Defense Authorization Bill.

But Eric Labs, the Congressional Budget Office's naval analyst, testified in July 2008 that the price for each ship likely would rise to about $700 million, including outfitting and various post-delivery expenses. Based on that grim forecast, Congress rescinded the $339.5 million it had provided in last year's defense appropriations for another LCS. The program was such a poster child for bad defense acquisition that it became part of the presidential campaign.

Republican candidate John McCain cited it as part of a defense system where "the costs are completely out of control." Understating both the initial cost and the current estimate, McCain said: "We tried to build a little ship called the Littoral Combat Ship that was supposed to cost $140 million, ended up costing $400 million, and we still haven't done it."

The winning Democratic candidate, Barack Obama, endorses the LCS concept, but said in a policy statement that "the process to build the ship was flawed, and indicative of a broader failure in the Navy's acquisition process." As President-elect Obama indicated, the LCS is not the only badly handled Navy shipbuilding program. For example, the cost of the DDG-1000, or Zumwalt -class destroyers, has jumped to more than $3 billion each, forcing the Navy to cut the planned buy from 32 to 7, and then to 3.

Even more disturbing is the LPD-17 class of amphibious ships. The first ship in the class, the USS San Antonio , cost nearly triple the original estimate, was years late in delivery, and was so riddled with construction flaws that her first deployment was delayed more than a year. Then, less than three months into her first cruise, she had to go into the yard in Bahrain for repairs on a dangerous oil leak. The second ship, the USS New Orleans (LPD-18), was nearly as flawed.

A $2.4 Billion, 97-Month Spiral

The Government Accountability Office reported last year that the Navy's six most recent new ship designs had a cumulative cost growth of $2.4 billion over original estimates and were an average of 97 months late in delivery. Those problems have evoked criticism even within the Navy. A mid-grade Navy officer in the Pentagon said the LCS "represents the outcome of what I call basically an incestuous relationship between DOD, industry, and the Congress." In that relationship, DOD asks for a ship and sets a certain level of requirements; lawmakers want as many as possible to create jobs in their districts; and industry sees it as a means of making a profit.

But the Navy keeps adding capability requirements, which increase the cost and reduce the number of ships it can buy. That makes the Navy want to add even more capability to offset the lower number of platforms, which makes them even less affordable, the officer said. "It's just a round-robin, circuitous death spiral in shipbuilding," he said.

As an indication of its unusual nature, the LCS program basically pits a modified Italian yacht against a revised Australian high-speed commercial ferry.

Lockheed Martin's LCS-1, named the USS Freedom , is a conventional single-hulled steel ship derived from a Fincantieri mega-yacht design. It is 378 feet long, with a 57.4 foot beam, a 12.8 foot draft, and a target displacement of 3,000 tons. General Dynamics' LCS-2, called the Independence , is based on the ferry design seen in the High-Speed Vessel Swift (HSV-2) that the U.S. military has been leasing. Although generally called a trimaran, or three-hulled vessel, it actually has one "very narrow hull, with training wheels," says LCS program manager Captain James Murdock. The ship is made mainly of aluminum, which is lighter but difficult to weld, Murdock said. The Independence is 418.6 feet long, with a 103.7-foot beam and 14.1-foot draft on its center hull.

Both ships have larger flight decks than any current surface combatant, and both have large hangars, able to hold at least one MH-60 helicopter and three Fire Scout rotary-wing unmanned aerial vehicles (UAVs) The ships are powered by two large marine turbines and four diesel engines that drive waterjets, rather than propellers, and are expected to be capable of top speeds above 40 knots. To get maximum operational use from the ships, the LCSs are expected to remain deployed for extended periods and manned by alternating Blue and Gold crews, similar to the pattern used by Trident ballistic-missile submarines. Although the target for crew size was 15, Murdoch said they could not get below 40, despite a high degree of automation.

While progress on the lead ships was not as fast as originally proposed, they were produced quicker than most recent warships. The Freedom 's commissioning last November came less than seven years from inception of the program and about four years after Lockheed Martin got the construction contract. The ceremony establishing the Freedom as a Navy ship followed acceptance trials on the Great Lakes that concluded 22 August with a finding that the ship was "capable, well built, and inspection ready."

"The ship was presented to the (inspection) board with high levels of completion in production and test," and "relatively low numbers of material deficiencies as compared to other first-of-class complex surface combatants," then-Navy acquisition executive Allison Stiller said. However, Murdock said the ship was five to six percent over its target weight. "I need to get some of that weight off," he said.

Early Problems

On leaving Milwaukee, the Freedom experienced problems with its diesel engines and generators and had to make an unscheduled port stop for repairs. After commissioning, the ship sailed to Norfolk, Virginia, where she will go into a post-delivery maintenance period before beginning some additional systems tests and operational evaluation.

The Independence was launched in April, but she is not expected to go through builder's and acceptance trials until early 2009. She reportedly suffered some structural damage while being moved in the Austal yard.

The feature that makes the LCS concept unique is the use of the portable mission packages to allow a ship to handle different operational assignments. At a briefing in November, Murdock said the LCS "is not a multi-mission ship," but is a "focused, single-mission" vessel. Mission packages are being developed to perform mine, antisubmarine, and surface warfare duties. Each mission package is comprised of a number of individual modules, which are similar to the 20-foot shipping boxes carried by commercial container ships.

Some of the containers, or modules, will hold off-board, remotely controlled sensors and weapons, while others will house data-receiving systems and operating consoles. The use of the off-board systems is intended to reduce risk to the LCS by keeping it some distance from the threats. The modules are to be loaded aboard the ship in port and stowed in the large interior space in the hull. They will be accompanied by 25 to 35 mission technicians.

The surface warfare package, aimed at combating small, fast attack craft used by Iran and other smaller navies and non-state fighters, will include two deck-mounted 30-mm MK 46 guns, used on the LPD-17, and the non-line-of-sight (NLOS) launch system being developed for the Army's Future Combat System. An MH-60 helicopter and one or more Fire Scout Vertical Takeoff UAVs, along with their aircrew or operators, would be part of all of the packages.

The interface between the ship's own systems and the mission packages will be handled by the Mission Package Computing Environment and the Multi Vehicle Communication System. The Navy currently plans to buy 64 mission packages - 24 each for mine warfare and surface warfare and 16 for ASW. Victor Gavin, executive director of the Littoral and Mine Warfare program office, said the LCS will replace the 14 dedicated mine countermeasures ships in the 2016-22 period.

The Marine Corps recently proposed another mission package that could support Marines in humanitarian assistance or combat missions. One such mission could be as a naval gunfire support platform in place of the curtailed DDG-1000. That would require more powerful and longer range weapons than selected for the surface warfare mission.

Preliminary models of the three confirmed mission packages have been delivered for testing by the Navy, but some components still are under advanced development. While operational testing on the Freedom and Independence could begin in FY 11, with the growing delay in follow-on contracts, both of the shipyards have had to cut their work forces and have been expressing concern about greater reductions.

But the FY 09 defense bills provided $1.02 billion in funding for two more LCSs and authorization to contract for three more in FY 10. The bills also lifted the cost cap on the two FY 09 ships. With that authority, on 3 November 2008 the Navy issued requests for proposals to the two contractor teams for those five ships. A Navy spokesman, Lieutenant Clay Doss, said the Navy plans to award one contract to each team by January, using the FY 09 funding. Contracts for the three other vessels would be awarded in 2010, with the lower bidder expected to get two.

Cheaper in the Future

The next five ships will be designated as Flight 0+ and will include previously approved engineering changes and improvements in construction, Doss said. A major goal is to reduce the cost of the future ships.

"We are looking for affordability. It's not the high-end option," Murdock said. The congressional authorization required the Navy to obtain fixed-price contracts for the future ships, and the cost cap will be restored for the three FY 10 ships. But retired Navy Captain Fred Moosally, president of Lockheed Martin Maritime Systems and Sensors, said if the cost cap cannot accommodate inflation, "I don't see how the $460 [million] number is going to hold up very long."

Murdock said the pending competition "puts me in a good position. I can apply leverage on the higher guy. The guy who gives me the best deal gets three of five, or four of five." He added, "We're trying to keep both in the game until we get good fleet trials. I've got to keep the cost pressure on them." The program also is "looking for stability," he said. "I need to get into serial production."

But the new acquisition plan cancelled the proposed 2010 sail-off between the two LCS models, with no new date set for a possible choice of a single design. Secretary Winter has indicated that the Navy might continue buying both types of LCSs, and Admiral Roughead hinted that competition for future construction could be opened to other contractors. Unofficial Navy projections for future budget years call for buying four LCSs in FY 11, five in FY 12 and FY 13, seven in FY 14 and nine in FY 15, which would give the service 40 of the 55 planned.

However, Representatives Gene Taylor (D-MS) and Roscoe Bartlett (R-MD), respectively the chairman and ranking member of the House Armed Services Seapower Subcommittee, remain critical of the LCS price tag and said they would hold hearings on the need for a cost cap or other ways to reduce the price.

Interest Abroad

Despite the criticism here at home, the LCS concept has attracted interest overseas. Murdock said the program office has had feelers from Israel, Saudi Arabia and other countries. Lockheed Martin was awarded a $2.3 million Foreign Military Sales contract in 2007 for concept and preliminary design work on the proposed Israeli Navy's LCS. Navy officials are very interested in having foreign buyers for the LCS, because increased production could cut their unit cost.

The Navy appears to be firmly committed to continuing with the LCS, while admitting that the program has not gone as well as it might have. Before he retired as Naval Sea Systems commander last year, Vice Admiral Paul Sullivan acknowledged that the Navy "went too fast" in pushing LCS into construction before the design was finalized.

Stiller also conceded that developing the NVR guidelines while the contractors were designing the lead ships put "too much concurrency in the program." And, she said, "we put an unrealistic cost goal, that industry initially signed up to meet, and we have all realized that the actual cost is going to be significantly higher."

At the Freedom commissioning, Winter said that despite its cost growth, the LCS still is "a very cost effective ship," that comes at "a small fraction of the cost of other surface combatants." Roughead agreed that "cost is always a concern . . . and we have to do everything we can to bring the cost down." But, he said, the LCS will "bring great capability, flexibility, speed" and will "be able to operate in places of the world where we normally don't operate because we don't have ships like this."

Commander Kreisher is a former Marine as well as a retired Navy Reserve officer. A veteran Washington correspondent, he was the military writer for the Copley News Service.